Lagos Property Market Consensus Report (H1 2020)

Lagos State Branch

C H A N G IN G T H E SK YL INES

Lagos Property Market Consensus Report H1 2020

A consensus of 178 Estate Surveyors & Valuers and Property Professionals in Lagos, Nigeria Lagos State Branch

From the Branch Chairman's Desk 1 Dotun Bamigbola FNIVS, FRICS August, 2020 Chairman, NIESV Lagos State Branch

The Data Agenda from 30 major neighbourhoods across Lagos State. Data is the singular most important missing factor in the Nigerian real estate The report, of course, has come at a market over the years. challenging time with the closure of the world economy, Nigeria inclusive, due to the While most advanced economies have lockdown during the COVID-19 pandemic, moved ahead with the availability of big which is currently being eased out. data, for development and investment decision making by both public and private The earlier prediction that the Nigerian real sector players in real estate and housing, estate sector was expected to grow at 2.65 the Nigerian market still suffers from a percent in 2020, has now been distorted by dearth of data availability. the COVID-19 pandemic. Similarly, the initial plan for a quarterly release of this With the real estate sector still contributing report has also been affected, hence the H1 low to Nigeria's GDP at 7% and in view of 2020 report which covers major 30 the expected growth by all players in neighourhoods in Lagos State, categorised private and public sectors over the years, under seven (7) zones. there is need for data to aid the growth of this all-important sector of the economy. The report provides average rental and This need for data has witnessed the sales values across the zones while the advent of some individual organizations Yield for each zone is captured. This is a which have released various real estate start. However, it remains relevant for good outlook reports in recent years. However, use by private sector investors (both local the availability of data on an institutional and foreign), professionals for advisory scale to make it credible, measurable and services and the public sector for reliable has been the challenge. measuring market progress and taking developmental decisions which will affect Now, the wait is over! The Lagos State the sector and the economy at large. Branch of the Nigerian Institution of Estate Surveyors and Valuers (NIESV Lagos State The release of the H2 2020 report, is Branch), has responded to this call by planned to coincide with our 50th Branch making available credible and reliable Anniversary in December 2020. It will property market data via this report. This provide data for an expanded coverage maiden edition of the Lagos Property area of Lagos State, including other aspects Market Consensus Report covers the half of real estate like commercial retail and year (January - June) 2020 - H1 2020 with industrial properties which are not covered data on rental and sales values of in this maiden report. residential and commercial properties w w w . n i e s v l a g o s . o r g 02 Lagos State Branch

Content

Page 02 From the Branch 1 Chairman’s Desk

Page 04 Executive 2 Summary

Page 06 3 Map of Lagos

Consensus Page 07 4 Pricing per Zone

Page 11 Property 5 Rental Yields

Page 13 6 Conclusion Page 14 7 Appreciation

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Executive Summary 2

The Lagos Property Market Consensus intending members. Report H1 2020 is a published account of average property values across various A controlled consensus survey was locations in Lagos State. Using the spot adapted to ascertain the average property consensus capital and rental values, the values per location. To achieve this, Lagos rental yields for each location were also State was divided into 7 zones: Island 1 computed. The aim of the consensus (Lagos Island, Old Ikoyi, S/West Ikoyi, report is to provide broad real estate data Banana Island, Victoria Island), Island 2 and promote transparency of the Lagos (Lekki Phase 1, Ikate, Osapa, Agungi & property market for good investment Chevron), Island 3 (Ajah, Sangotedo, decisions. The report will be of utmost Awoyaya & Lakowe), Mainland 1 (Surulere, beneﬁt to major stakeholders like Yaba, Ilupeju & Gbagada), Mainland 2 professionals, investors, end users and (Amuwo Odoﬁn, Isolo, Festac, Apapa), government agencies. The data was Mainland 3 (Ikeja GRA, Maryland, Ikeja & provided via survey by 14 Fellows of the Alausa) and Island 4 (Ogba, Ogudu, Institution (FNIVS), 86 Associate members Magodo GRA 1 (Isheri) & Magodo GRA 2 (ANIVS) and 78 Probationers/Graduates (Shangisha).

Table 1: H1 2020: Average Land, Residential & Oﬃce Prices in Lagos

Island Zone 1

Island Zone 2

Island Zone 3

Mainland Zone 1

Mainland Zone 2

Mainland Zone 3

Mainland Zone 4

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Data was gathered on the average land nascent Island 2 areas is also reflected in its prices, 3-bed & 4-bed rental and sale prices h i g h p r i c e o f l a n d a v e r a g i n g and office space prices, in the various ₦112,021/sqm. Per house types, Island 1 locations mentioned above. Island 1 zone zone has the highest values (rental & sale) recorded the highest land prices followed for both 3-bedroom and 4-bedroom by Mainland 3. This is a reflection of the houses. The same also goes for office deepened level of commercialization in space rental values. these 2 zones. The growing development in

Table 2: H1 2020: Average Residential Rental Yields

Utilizing the average residential capital As mentioned earlier, this report aims at values and rental values in 30 nodes within closing a previous gap of unavailability of the state (Lagos) the corresponding rental property price data. However, in using this yields were computed as shown in the data provided, It is critical to understand chart above. Chevron showed the highest that these ﬁgures are averages of a yield of 6.87%, next was Agungi (6.31%), consensus of value opinions and may not while Osapa came in third with 6.06%. The reﬂect every individual transaction. lowest yield was seen in Ogudu – 3.10%, next being Magodo Shangisha – 3.19% and third being Magodo Isheri 3.20%. The median yield in Lagos state from this consensus analysis is 4.32% and it is obtainable in Yaba.

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Map of Lagos State 3 Showing zonal structure adopted in the Lagos Property Market Consensus Report

Mainland 3

Mainland 4

Mainland 1

Ajegunle Island 3 Mainland 2 Island 1 Island 2

ISLAND 1 ISLAND 2 ISLAND 3 MAINLAND 1 MAINLAND 2 MAINLAND 3 MAINLAND 4

1. Lagos Island 6. Lekki Phase 1 11. Ajah 15. Surulere 19. Amuwo Odon 23. Ikeja GRA 27. Ogba 2. Old Ikoyi 7. Ikate 12. Sangotedo 16. Yaba 20. Isolo 24. Maryland 28. Ogudu 3. South-West Ikoyi 8. Osapa 13. Awoyaya 17. Ilupeju 21. FESTAC 25. Ikeja 29. Magodo GRA 1 (Magodo Isheri) 4. Banana Island 9. Agungi 14. Lakowe 18. Gbagada 22. Apapa 26. Alausa 30. Magodo GRA 2 (Magodo Shangisha) 5. Victoria Island 10. Chevron

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Consensus Pricing Per Zone 4

Zone A Table 3: Island 1 Lagos Island, Old Ikoyi, South-West Ikoyi, Banana Island & Victoria Island

Responses were gotten from 24 practicing ₦ 1 0 5 , 2 6 3 / s q m f o r o ffi c e s p a c e Estate Surveyors and Valuers /property respectively. Lagos Island commands the professionals in areas such as Lagos Island, lowest value across all categories. This is Old Ikoyi, South-West Ikoyi, Banana Island largely due to infrastructure stress and and Victoria Island. Banana Island increasing densification in the area. commanded the highest value across all Victoria Island is home to a number of property categories and still maintains its luxury apartments, flats, maisonettes and status as the most expensive location in penthouses and this is reflected in its high Nigeria. In terms of house and office types, rental and sale price for a 4-bedroom Banana Island and Old Ikoyi are the upper- house. Property data from this zone has a class markets with both recording an high response rate from serviced a v e r a g e o f ₦ 1 4 3 , 3 3 3 / s q m a n d commercial and residential uses.

Zone B Table 4: Island 2 Lekki Phase 1, Ikate, Osapa, Agungi & Chevron

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Responses were gotten from 28 practicing values will likely be on the increase. The Estate Surveyors and Valuers /Property ﬂooding situation in Agungi axis has Professionals in areas such as Lekki Phase hampered a little on its property market 1, Ikate, Osapa, Agungi and Chevron. Land and is commanding the lowest values in values commanded the highest in Lekki the zone. Property data from this zone has Phase 1 – ₦173,519/sqm on the average. a high response rate from serviced Lekki Phase 1 has grown to become a commercial and residential uses, choice location for investment and is particularly around the Chevron area, becoming increasingly so. Ikate's proximity which has mostly serviced residential to Lekki Phase 1 has positioned it the 2nd estates. This has signiﬁcant impact on the highest-class market in the zone. Osapa rental and sales values. and Chevron are doing relatively well, and

Zone C Table 5: Island 3 Ajah, Sangotedo, Awoyaya & Lakowe

Responses were gotten from 12 practicing presently, are home to upcoming and Estate Surveyors and Valuers /Property future developments. The introduction of Professionals in areas like Ajah, Sangotedo, major businesses and presence of Awoyaya and Lakowe. Ajah seems to have supporting infrastructure will further the highest values followed by Sangotedo. increase the property values in these Nascent locations such as Awoyaya and locations and entire zone. Lakowe, though having the lowest values

Zone D Table 6: Mainland 1 Surulere, Yaba, Ilupeju & Gbagada

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Responses were gotten from 35 practicing locations compared to Yaba and Surulere. Estate Surveyors and Valuers /Property Rental prices for 3-bedroom apartments in Professionals in the following locations: Surulere and Gbagada seem to have the Surulere, Yaba, Ilupeju and Gbagada. In same value while Yaba records the lowest terms of land prices, Ilupeju holds the in the pack. Though residential values highest value, followed by Gbagada. This is seem to higher in Surulere than Yaba, price largely a result of the industrial and for oﬃce spaces are higher in Yaba. commercial concentration in both

Zone E Table 7: Mainland 2 Amuwo Odoﬁn, Isolo, FESTAC, Apapa

Responses were gotten from 16 practicing This is reflected in the property values Estate Surveyors and Valuers in Amuwo (rental and sale) in Apapa compared to Odofin, Isolo, Festac and Apapa. Land other locations. Amuwo Odofin serves as a prices command the highest in Apapa covering for FESTAC, both recording close averaging ₦80,714/sqm and commands residential values. In terms of land and the lowest in Isolo, ₦17,400/sqm. Some house types, Isolo records the lowest parts of Apapa still accommodates high- values in the zone. income citizens and upscale apartments.

Zone F Table 8: Mainland 3 Ikeja GRA, Maryland, Ikeja & Alausa

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Responses were gotten from 33 practicing government secretariat and other major Estate Surveyors & Valuers /property institutions. This is reflected in its high land professionals in areas like Ikeja GRA, and house prices. Ikeja metropolis is highly Maryland, Ikeja and Alausa. Ikeja GRA has commercial and is the location for many the highest values across all property offices and businesses, and is the 2nd categories including office space prices. highest location for office spaces in the Alausa plays host to the Lagos state zone.

Zone G Table 9: Mainland 4 Ogba, Ogudu, Magodo GRA 1 (Isheri) & Magodo GRA 2 (Shangisha)

Responses were gotten from 24 property Magodo Isheri commands lower value professionals in areas such as Ogba, especially for oﬃce spaces. Ogudu has Ogudu, Magodo GRA (Isheri) and Magodo grown to become a favorable location for GRA (Shangisha). Magodo Shangisha is the mid and high-income class due to its home to high-class citizens who reside on serenity and accessibility. Ogba commands the mainland. This is reﬂected in its high the lowest values in the zone with rental price values, leading the chart in the zone. price for a 3-bedroom apartment standing Though in close proximity to Shangisha, at ₦756,522 per annum

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Rental Property Yields 5

Via a consensus of Estate Surveyors and the state (Lagos) were computed. The Valuers and other Property Professionals rental yields were computed using the in Lagos state, average residential capital formula: values and rental values in 30 nodes within

Average Rental Value X 100 = Rental Yield Average Capital Value

From the consensus data, Chevron showed 3.19% and third being Magodo Isheri the highest yield of 6.87%, next was Agungi 3.20%. It is critical to understand that these (6.31%), while Osapa came in third with ﬁgures are averages of a consensus of 6.06%. The lowest yield was seen in Ogudu value opinions and may not reﬂect every – 3.10%, next being Magodo Shangisha – individual transaction.

Table 10: Island 1 Rental Yield (%)

Table 11: Island 2: Rental Yield (%)

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Table 12: Island 3: Rental Yield (%)

Table 13: Mainland 1 Rental Yield (%)

Table 14: Mainland 2 Rental Yield (%)

Table 15: Mainland 3 Rental Yield (%)

Table 16: Mainland 4 Rental Yield (%)

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Conclusions 6

Following the consensus survey carried out in the same zone is home to the highest on average property prices, the following oﬃces and businesses with rental costs conclusions are pertinent: as low as N22,413/sqm.

1. Land and house prices in Island 2 and 3 . T h e p r e s e n c e o f s u p p o r t i n g Island 3 zones are likely to keep infrastructure has contributed to the increasing as the area welcomes more capital value increase in Mainland 4 development. Major projects like the especially in Ogudu and Magodo ongoing Dangote Refinery, Lagos Free Shangisha areas, but this has not met Trade Zone, 4th Mainland Bridge and corresponding rental valuation new city – Alaro City, which are all resulting in lower yields. expected to come onstream in a few years. upon completion, will further 4. Ikeja GRA and its surrounding areas like trigger the rise in property values in the Maryland, Mende, Shonibare estate zones. remains the most expensive locations on the mainland part of Lagos State. 2. Island 1 records the highest rentals for This is expected to continue as more office spaces in Lagos State. The high r e s i d e n t i a l a n d c o m m e r c i a l rental costs of Grade A office buildings development come up in these located in Banana Island, Ikoyi and neighbourhoods, particularly Ikeja Victoria Island have contributed to this. GRA, in few years' time. However, Lagos Island, though situated

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Appreciation 7

Our appreciation goes to all registered Estate Surveyors and Valuers as well as other Property Professionals who are practicing in Lagos State for their immense contributions towards the success of this maiden Lagos Property Market Consensus Report (H1 2020). Special appreciation to members of the Research and Development Sub-Committee of NIESV Lagos State Branch, whose hard work and creativity has produced this report.

Research & Development Sub-Committee Member

Kevin Oﬁli – Sub-Committee Chairman Abosede Ige – Sub-Committee Secretary Tayo Odunsi – Member Nnenaya Awoyokun – Member Olukayode Abdulazeez – Member Alabi Afeez – Representative of University of Lagos Alabi James – Representative of Yaba College of Technology Bamidele Oyewunmi – Representative of Lagos State Ministry of Housing Adebila Owokade – Representative of LASURA Prof. Modupe Omirin – Adviser Dr. Emeka Iroham – Adviser

w w w . n i e s v l a g o s . o r g 14 Contributing Firms

w w w . n i e s v l a g o s . o r g 15 Plot A, Block 12, Elephant Cement Way, CBD Alausa, Ikeja, Lagos. Tel: +234(0)807913333

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