Property & Real Estate | |
Property & Real Estate | |
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Tuesday, November 19, 2019 /
09:00AM / NorthCourt / Header Image Credit:
As the
Pillars Remain
The supply side of the residential real estate
market continues to show signs of life. Tenants, yet to recover from the weak
economy pushed for better rents to Landlords who conceded - but only
negligibly. Middle income 'work, live and play' projects were announced by
developers. And land values have appreciated with frontier land investments in
Lagos offering impressive rates of return. Also, the real estate sector came
out of recession in Q1, growing by 0.93%.
Online retailer, Jumia listed in London after a few
fits and starts. Local retailers have continued to display confidence leaning
on improved distribution networks. Logistics firms Gokada and Max.NG raised
$5.3M and $7M respectively. Konga plans to list on the New York Stock Exchange
by 2020. Hubmart also opened a new store. Eat N' Go Africa, franchisees of
Domino's Pizza opened its 100th location and plans 300 more over the next 5
years. Analysts believe that the Federal Government scored its highest ratings
in infrastructure. And it has continued to push its growth agenda, signing a
25,000MW six-year electricity deal with Siemens.
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. Still, 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 your investment
consideration.
400,000m2 of Grade-A office space is expected in
2019. Coworking continues to grow as business owners are unable to meet up to
the dollar rents obligations for Grade A office space. Nigeria's commercial
real estate market is going green. Most ongoing prime office developments - or
those that have been delivered in recent years are a testament to the fact that
green buildings have come to stay. The US government acquired about 50,000m2 of
land in Eko Atlantic City for the Consulate's new head office. A 21-storey
smart office tower is being constructed in Uyo, Akwa Ibom state at an
approximate cost of ₦19Bn,
funded via a PPP. Upon completion, it is expected to house leading oil services
firms.
Security has grown as a critical selector tool in
the residential market. Secure gated communities are priced higher than estates
perceived to be less so. Investment thinking in property is shifting. Some
expect the new administration to devalue the currency with the uncertainty
around this delaying property purchasing decisions. Some investors are opting
to buy assets out of the country. Many are looking to sell local assets. On
this backdrop is the migration of young and middle-aged professionals to
Western economies, a fact not lost on the balance sheets of local agents. The
residential real market is gradually picking up. Tenants pushed for better
deals with Landlords making little or no reductions. Mini flats, 1 and 2 Bed
flats remain favourites.
Residential vacancy rates
in Port Harcourt have moved - but only slightly when compared with EoY 2018.
Old GRA, GRA Phases 1, 2 and 3 recorded vacancy rates of 7%, 9%, 9% and 15%
respectively. Abuja's Apo and Gwarimpa are 14% and 2% vacant. Ikoyi and
Victoria Island in Lagos state are respectively 41 and 23% vacant.
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